May 21--Minority homeowners and those with limited English proficiency fare worse than others when trying to avoid foreclosure, according to a recent report from the California Reinvestment Coalition.
CRC surveys nonprofit housing counselors and legal service lawyers to gauge how homeowners fare when faced with foreclosure. The umbrella group of nonprofits and public agencies advocates for equitable financial service access in low-income and minority areas.
The survey gathered responses from 66 counselors and legal service representatives working with homeowners. It concluded that while loan servicers have improved their practices, they're doing a poor job preserving homeownership. According to the survey, violations of state and federal laws continue, such as loan servicers moving forward with foreclosures while at the same time reviewing homeowners' loan modification applications.
Wells Fargo and Bank of America were named among the worst mortgage servicers in the survey.
Tom Goyda, a spokesman for Wells Fargo, said over the past year, the bank has helped increase counselor access for customers.
"Wells Fargo has been a leader in preventing foreclosures and helping families maintain home ownership with nearly 937,000 modifications nationwide since the beginning of 2009," Goyda said in an email.
Spokeswoman Jumana Bauwens said Bank of America has provided loan modifications for 300,000 California homeowners and $11 billion in consumer relief during the housing crisis.
"We work hard to help our customers with home retention and other foreclosure-avoidance programs," Bauwens said.
In 2010, in the wake of the foreclosure crisis, banks stopped thousands of foreclosures after allegations emerged that financial institutions mishandled foreclosures. New federal and state rules were put in place to address those issues.
The CRC survey's respondents said problems included lost documents and a lack of accountability in following mortgage rules. Families of homeowners who had died had particular difficulty.
Sheetal Sharma's father died in 2010, and the title for her father's Los Angeles house was transferred to Sharma, her sister and mother, according to the CRC report. The mortgage servicer, EMC Mortgage Corp., wouldn't give Sharma information about the loan or how much was due. Sharma eventually stopped making payments, and EMC filed a default notice.
Eventually, JPMorgan Chase took over servicing the loan. The family made submissions for a loan modification, which was denied. Some correspondence was sent to Sharma's late father. JPMorgan Chase didn't allow the family to bring the loan current, and fees have been accumulating, Sharma said.
A representative from JPMorgan said Tuesday it wasn't possible to comment specifically on the Sharma case immediately, given that the details would take time to research and the address had been redacted from the CRC report.
"We work very hard every day to help struggling families modify their mortgages or otherwise help avoid foreclosure," said Jason Lobo of JPMorgan Chase. "Since 2009, we have provided more than $27 billion in loan modifications with principal reduction for Californians. Our efforts have helped prevent more than 253,000 foreclosures for families across the state."
Daniel Rodriguez, with the East L.A. Community Corp., said language barriers and the lack of a single point of contact at mortgage servicers were problems for homeowners in Boyle Heights and East Los Angeles, where his organization works.
Post-recession, it may feel like the foreclosure crisis has passed, said Rodriguez, whose nonprofit assists homeowners facing foreclosure and was one of the survey respondents.
Even so, "there's still a lot of folks that are struggling to complete their payments," he said.
Contact the writer: firstname.lastname@example.org
(c)2014 The Orange County Register (Santa Ana, Calif.)
Visit The Orange County Register (Santa Ana, Calif.) at www.ocregister.com
Distributed by MCT Information Services